Question

A company borrows $11,000 at 9% for 60 days. Find (a) the amount of interest due and (b) the total amount that must be paid after 60 days. (a) The interest due is $ (Simplify your answer. Do not round until the final step. Then round to the nearest cent as needed.)

Answer 1

we know that

The simple interest formula is equal to

`A=P\mleft(1+rt\mright)`

where

A is total amount that must be paid

P is the total amount of money borrowed

I is the amount of interest

r is the rate of interest

t is Number of Time Periods

in this problem we have

P=$11,000

r=9%=9/100=0.09

t=60/365 years

substitute

`\begin{gathered} A=11,000(1+0.09\cdot(60)/(365)) \\ A=\$11,162.74 \end{gathered}`

so

Part a) The interest is

I=11,162.74-11,000

I=$162.74

Part b) the total amount is

A=$11,162.74